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Determining What Works, Line by Line

OMB Director Peter Orszag tells us about the budget being released today, in particular the volume on Terminations, Reductions, and Savings.

We in the Administration have spoken often about the President’s Budget heralding a new era of responsibility—an era in which we not only do what we must to lift our economy out of recession, but in which we also lay a new foundation for long-term growth and prosperity. This means making long overdue investments and reforms in health care, education, and energy. It also means restoring fiscal discipline. We cannot put our nation on a course for long-term growth with uncontrollable deficits and debt, and we no longer can afford to tolerate investments in programs that are outdated, duplicative, ineffective, or wasteful.

That’s why the Budget we’re releasing today includes a separate volume, Terminations, Reductions, and Savings, which identifies more than 100 terminations, reductions, or other areas of savings that take nearly $17 billion off the federal government’s bottom line next year alone. About half of the savings for next fiscal year are from defense programs, and about half are from non-defense programs.

The programs in Terminations, Reductions, and Savings are ones that do not accomplish the goals set for them, do not do so efficiently, or do a job already done by another initiative. They include these ten:

LORAN-C ($35 million): This long-range, radio-navigation system has been made obsolete by GPS.

Abandoned Mine Lands Payments ($142 million): This program now pays to clean up mines that have already been cleaned up.

Educational attaché, Paris, France ($632,000): The Department of Education can use e-mail, video conferencing, and modest travel to replace a full-time representative to UNESCO in Paris, France.

Los Alamos Neutron Science Center refurbishment ($19 million): The linear accelerator housed here was built 30 years ago and no longer plays a critical role in weapons research.

Even Start ($66 million): The most recent evaluation found no difference between families in the program and those not in it across 38 of 41 outcomes. Strengthening early childhood education is accomplished through significant investments in proven, more effective programs such as Head Start, Early Head Start, and the Early Learning Challenge Fund.

Christopher Columbus Fellowship Foundation ($1 million): Due to high overhead, the Foundation would spend only 20 percent of its 2010 appropriation on the fellowships it awards.

Advanced Earned Income Tax Credit ($125 million): This program benefits very few taxpayers, and has an extremely high error rate: GAO found that 80 percent of recipients did not meet at least one of its requirements.

Javits Gifted and Talented Education Program ($7 million): Grants from this program go to only 15 school districts nationwide, and there are no empirical measures to judge their efficacy.

Public Broadcasting Grants ($5 million): USDA made these grants to support rural public broadcasting stations in their conversions to digital broadcasting. That transition is now almost complete.

Rail Line Relocation Grants ($25 million): This program, duplicative of a merit-based program, is loaded with earmarks.

The steps we are detailing in Terminations, Reductions, and Savings are part of the Administration’s larger effort to change how Washington does business and put the nation’s fiscal house in order. Today represents a significant installment in our commitment to review the federal budget line by line.

But our efforts to restore fiscal responsibility have already begun. To date, we have taken the following steps to cut waste, save taxpayer dollars, and make government more effective:

The Budget includes an historic down payment on health care reform, the key to our long-term fiscal future.

The Budget will cut the deficit in half by the end of the President’s first term and was constructed without commonly used budget gimmicks that, for instance, hide the true costs of war and natural disasters.

The Budget will bring non-defense discretionary spending to its lowest level as a share of GDP since we began keeping records in 1962.

The President has announced a contracting reform effort that will greatly reduce no-bid contracts and help to save $40 billion. In support of this effort, Secretary of Defense Gates, in consultation with our nation’s military leadership, unveiled an unprecedented effort to reform defense contracting.

The President directed agency heads at the first Cabinet meeting to identify at least $100 million in administrative savings.

The President personally called on the congressional leadership to pass PAYGO laws so that Congress will be required to adhere to a simple principle: to pay for what it spends.

Now, every one of the programs listed in our Terminations, Reductions, and Savings volume has a supporter, and there will be vocal and powerful interests that will oppose different aspects of this Budget. I am under no illusions that change will be easy, but after an era of profound irresponsibility, I believe that Americans are ready to put problem-solving ahead of point-scoring and to reconstruct an economy built on a solid foundation.

That’s why I know the President will work with Congress to reform and transform Washington, to make these needed cuts so that we use taxpayer dollars to invest in what works and put our nation back on the path toward prosperity for all Americans.